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The Department of Transportation's Federal Highway Commission has
released the latest report on Traffic Volume Trends, data through October.
Travel on all roads and streets changed by 0.3% (0.9 billion
vehicle miles) for October 2012 as compared with October 2011.
The 12-month moving average of miles driven increased only 0.51%
from October a year ago (PDF report). And the civilian
population-adjusted data (age 16-and-over) has set another
post-financial crisis low.

Here is a chart that illustrates this data series from its
inception in 1970. I'm plotting the "Moving 12-Month Total on ALL
Roads," as the DOT terms it. See Figure 1 in the PDF report, which charts the data from 1987. My
start date is 1971 because I'm incorporating all the available
data from the DOT spreadsheets.

The rolling 12-month miles driven contracted from its all-time
high for 39 months during the stagflation of the late 1970s to
early 1980s, a double-dip recession era. The most recent dip has
lasted for 55 months and counting — a new record, but the trough
to date was in November 2011, 48 months from the all-time high.

The Population-Adjusted Reality

Total Miles Driven, however, is one of those metrics that should
be adjusted for population growth to provide the most revealing
analysis, especially if we're trying to understand the historical
context. We can do a quick adjustment of the data using an
appropriate population group as the deflator. I use the Bureau of
Labor Statistics' Civilian Noninstitutional Population Age 16 and
Over (FRED series CNP16OV). The next chart incorporates that
adjustment with the growth shown on the vertical axis as the
percent change from 1971.

Clearly, when we adjust for population growth, the Miles-Driven
metric takes on a much darker look. The nominal 39-month dip that
began in May 1979 grows to 61 months, slightly more than five
years. The trough was a 6% decline from the previous peak.

The population-adjusted all-time high dates from June 2005.
That's 88 months — over seven years ago. The latest data, for
October 2012, is 8.68% below the 2005 peak, a new post-Financial
Crisis low. Our adjusted miles driven based on the 16-and-older
age cohort is about where we were as a nation in February 1995.

Here is a closer look at the series since 2000, which gives a
better look at the 2012 flatline -- similar to the equivalent
months in 2010.

I've frequently been asked why I use the CNP16OV data for the
population adjustment, often with the suggestion that it would
make more sense to limit the population to licensed drivers. For
openers, I don't know of a valid source for the driver-licensed
population. Moreover, the correlation between license holders and
actual drivers is not a reliable one. Many license holders in
households do not drive, especially in their older years.
According to Census Bureau data on gasoline sales (courtesy of
Harry Dent's research on demand curves), dollars spent on gasoline
peaks for people in their late 40s and falls off rather quickly
after that.

In fact, I think there's a good case for using the Census
Bureau's mid-month estimates of total population (POPTHM) rather than civilians age 16 and over for
the population adjustment. The reason is that a portion of total
miles driven is specifically to support children's needs (day
care, schools, children's activities, etc.) and the needs of
elders who might have licenses but no longer drive. Ultimately
the division of miles driven by either population group (CNP16OV
or POPTHM), while not a perfect match with drivers, is a
consistent and relevant metric for evaluating economic growth.

Here is the same population-adjusted chart, this time with the
total population for the adjustment. In the total-population
adjusted version the post-recession low is the latest data point
of -7.38%.

What about the impact of volatile gasoline prices? How much of a
factor has that been in the trend? I'll close with an overlay of
the population-adjusted miles driven and gasoline prices since
the early 1990s.

As is readily apparent, the correlation is fairly weak over the
entire timeframe (+0.32). And, despite the volatility in gasoline
prices since the onset of the Great Recession, the correlation
since December 2007 has been even weaker (-0.26). There are
profound behavioral issues apart from gasoline prices that are
influencing miles driven. These would include the demographics of
an aging population in which older people drive less, continuing
high unemployment, and the ever-growing ability to work remote in
the era of the Internet.

One particularly interesting trend was highlighted in a recent
study on "Transportation and the New Generation" by the Frontier Group.

From 2001 to 2009, the average annual number of vehicle
miles traveled by young people (16 to 34-year-olds)
decreased from 10,300 miles to 7,900 miles per capita—a
drop of 23 percent. [PDF source]

The DOT "miles driven" metric is also interesting to study in the
context of gasoline volume sales, which I also update monthly: